Global Oil Prices Drop on Higher U.S. Inventories

• Global Oil Prices Drop on Higher U.S. Inventories

Global oil prices declined on Wednesday as U.S. oil inventories rose than expected last week.

The American Petroleum Institute had reported on Tuesday that domestic crude oil inventories rose by 5.6 million barrels last week. However, the Energy Information Administration on Wednesday validated the build-up but by 3.8 million barrels, still more than the 2.4 million barrels expected by most analysts surveyed by S&P Global Platts for the week.

The build-up in supplies weighed on global oil outlook, especially after a survey conducted by Bloomberg showed Saudi Arabia pumped more crude oil in July. The kingdom’s oil production grew by 230,000 barrels a day in the month of July to 10.65 million barrels per day, slightly below an all-time peak attained in 2016.

Rises in production in Saudis, Nigeria and Iraq pushed up OPEC’s total oil production by 300,000 barrels per day, offsetting whatever deficit created by political clashes in Libya, economic collapse in Venezuela and the onset of US sanctions against Iran.

Brent crude oil declined by 1.85 per cent to $72.57 a barrel as at 9:20 pm Nigerian time, while US West Texas Intermediate dipped by 1.51 percent to $67.72 per barrel.

Global uncertainties continued to impact commodity market as investors anticipated additional tariffs on $200 billion Chinese imports by the U.S. A decision China projected will further hurt global growth and slow down progress thus far.

However, the world’s second-largest economy said he would retaliate with similar measures if Donald Trump led administration go ahead with high tariffs.

OPEC is expected to release its official oil market report for July on August 13.